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What Should We Expect From On Deck Capital, Inc.’s (NYSE:ONDK) Earnings In The Next 12 Months?

Alex Johannesen

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Since On Deck Capital, Inc. (NYSE:ONDK) released its earnings in September 2018, the consensus outlook from analysts appear highly confident, as a 54% rise in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 9.0%. By 2020, we can expect On Deck Capital’s bottom line to reach -US$17.7m, a jump from the current trailing-twelve-month of -US$11.5m. Below is a brief commentary around On Deck Capital’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for On Deck Capital

How is On Deck Capital going to perform in the near future?

The longer term view from the 10 analysts covering ONDK is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for ONDK, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:ONDK Future Profit February 13th 19

This results in an annual growth rate of 23% based on the most recent earnings level of -US$11.5m to the final forecast of -US$21.8m by 2022. This leads to an EPS of $0.43 in the final year of projections relative to the current EPS of $-0.16. However, the expansion of the current -5.8% margin is not expected to be sustained, as it begins to contract to -5.1% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For On Deck Capital, I’ve compiled three key factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is On Deck Capital worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether On Deck Capital is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of On Deck Capital? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.